essay范文:Temporary crisis but forever responsibility

Temporary crisis but forever responsibility

Introduction

The outbreak of the financial crisis was marked by the bankruptcy of Leman Brothers in Sep.2008. Quickly a series of chain reactions triggered strong social panic; finally, it had become a global crisis. Nowadays, more than a year has passed; there is still no one country can declare that it has recovered from the crisis. The effects of the financial crisis are hard to summarize now, because the world is still going through the pain it brought. 代写留学生论文/留学生论文代写 http://ukthesiss.com Thousands of firms, as the participants of the market economy, suffered from considerable damage. No matter what the firms engage in; No matter how size of firms are, even no matter where firms locate, they can not get away from the effects of the crisis (Kolko, Jed, Neumark, David, 2010). These firms have to take steps in order to survive; as a result, the reduction in the firm’s cost is becoming a common trend. People worry about if there is a possibility for firms to reduce costs while ignoring their social responsibilities (Rodríguez, Inda M., 2009). The article will discuss how the financial crisis affects firms at first; the following will be what these measures to reduce costs are; finally, it will be the description of the relationship between the reduction in the firm’s cost and social responsibility.

The effects of the financial crisis on firms

The effects of the financial crisis on firms are extensive and intensive. Even it is called financial crisis, it does not mean that it just brings effects to the finance. In fact, any industry involves in it. Many economists considered it as the most serious crisis since the 1929’s great economic depression. The market economy is dominant in the world economy; the free flow of capital and goods is the most important characteristic in the market economy. What is more, the relationship between capital and goods is interactional, once the flow of capital is poor, the flow of goods must be affected. It is well-known that the firms provide the society with goods and services, and the operation of firm must be dependent on capital (Hobdari, Bersant, Jones, Derek C., Mygind, Niels, 2009). Apart from this, the goods and services firms produce need to be purchased by consumers. The economic operation will be healthy if this cycle processes regularly; but the economy will be depressed if any part is blocked. According to the above theory, the analysis of the effects of the financial crisis on firms is as follows. Firstly, a large number of banks bankrupted, which made the firms can not get investments and consumers can not get loan from banks. The United States needs to be described specially. America is the greatest economy entity and the biggest trading nation in the world; do not forget that it is exactly the origin of the financial crisis. The bankruptcies of banks were from the bursting of the housing bubble and subprime lending crisis. Secondly, the philosophy Americans advocate is to spend before earn, the money they spend on housing, car and education is always loaned from banks, basically they do not have much savings (Raymond, Nate, Hallman, Ben, 2009). Another point needs to be noted, in the past years, the number of trade deficit of America has been amazing, which means Americans spent much money on buying goods and services from other countries. Try to think about, as the richest country and the biggest consumer, now it has no money to invest and consume, absolutely a series of chain reactions are not avoided. The reports that TV and Newspaper are filled with were about the rate of unemployment, GDP and CFI. Generally speaking, invest and consume are the two forces to drive the economic growth, the economy suffered from depression is normal when the two forces were no longer strong. Thirdly, economic growth of many developing countries is supported by the foreign trade. The size of international trade was meeting decline as the reduction of investment and consume, many enterprises can not receive orders, so they have to reduce the scale of production, even shut down. Through the above analysis, it can be seen there is a cycle made up of investment, production and consumption. Now the cycle was destroyed, so the production of firms lost motivation. The firms must do something to handle these difficulties they are facing.